It’s a good day in Portland when a major construction project gets going, especially one like Park Avenue West that’s been halted for more than four years.

TMT Development initially conceived the tower to house retail, office and condo space, then scrubbed the condos when the economy collapsed. Today, president Vanessa Sturgeon announces that the tower is back in business and includes 15 floors of apartments — 211 in all. TMT closed a construction loan with PCCP LLC on Tuesday for the $175 million project.

TMT certainly isn’t the first to marry office space and apartments. Gerding Edlen Development and its partners did the same thing at 12 | West, the Southwest 12th and Washington tower that houses both the Indigo apartments and the corporate offices of ZGF Architecture.

But with Park Avenue West, it’s become clear that apartments are playing an outsized role in most construction projects these days.

I caught up with John Swanson, executive vice president and division manager for Umpqua Bank’s commercial real estate division, to chat about the construction lending environment. Umpqua isn’t involved with the Park Avenue West deal.

Portland Business Journal: Are apartments prevalent in the construction projects you’re looking at?

Swanson: We probably have more apartment loans under construction than any other product type, not just in Portland but our Seattle and Walnut Creek markets.

PBJ: What factors make apartments attractive to construction lenders?

Swanson: We’re seeing people wanting to live in urban settings and avoid cars. Portland added something like 19,000 jobs over the last 12 months. That’s a good number and that drives new multifamily projects. Portland has an apartment vacancy rate of about 3 percent, which is remarkable. In the longer term, you can adjust rents on apartments to adapt to the market faster than other product types. Leases tend to be in the six- or 12-month range. That’s a big draw.

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